Commercial Bank Law

Question: Discuss about theCommercial Bank Law. Answer: In accordance to the facts for the provided case Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) CLR 447 (12 May 1983) it can be noticed that there were primarily three causes of action i.e. legal issues that was emphasized upon by Mr. and Mrs. Amadio in the process of challenging the mortgage guarantee signed by them in the High Court of Australia. The three major claims or causes of actions during the proceeding of the case were: unconscionable bargain, the process of transaction included undue influence and the presence of suppression of facts or misrepresentation. Following the examination of the facts the conclusion drawn by appeal court had vast impact on the trial judges decision, which was reversed. The appeal was upheld in the court. The appeal court ordered to set aside the mortgage (Australiancontractlaw, 2013). It was further held by the court that it was the obligation of the bank to disclose the companys accounts actual position. It was further stated by the court that in regards to Vincenzos misrepresentations the bank was liable. The appeal court held that the nature of transaction was that of an unconscionable one which required equity in order to provide relief. According to the judgment given by Justice Gibbs, in a contract of guarantee where one party is obliged to disclose entire facts to the other party, in such a case it is not of utmost good faith. It is mentionable here that the judgment further stated that on the part of the bank that takes a guarantee is only bound to reveal the facts that has occurred between the principal debtor and the bank , to the intending surety that was not expected to have occurred naturally. Hence the requirement for the revealing goes to the extent in cases where some unusual features in the in the specific case associated with the specific account that is supposed to be guaranteed is required. On the basis of this aspect, in the judgment it was concluded that failure on the part of the bank resulted in misrepresentation. In the context of the provided facts of the case, it can be noticed that major financial difficulties were being faced by Vincenzos company was a major dimension of the resulted in persuading Justice Gibbs in coming to the conclusion that disclosure should have been made by the bank (austlii, 2015). Another fact of the case, i.e. the arrangement between Vincenzo Amadio and the bank on companys behalf on 24th March which also contributed to persuading Justice Gibbs that disclosure should have been made by the bank. The occurrence of misrepresentation and non-liability or no binding of the respondents are the legal issues identified by Justice Gibbs that largely influenced the decision or verdict of this case (Misrepresentation act, 2001). The ratio for the decision was on favor of Mr. and Mrs. Amadio. Reasonably the case was not decided on legal grounds but the approach observed from the scenario shows that they were innocent and they needed justice reasonably. Contract of guarantee was made after the decision taken by Justice Gibbs. Revealing requirement is mentioned in extent (Vout, 2006). Vincenzo is a principal debtor and his parents are guarantor, so misrepresentation is found from the part of the bank and judgment stands against the bank and Vicenzo, as Mr. Mrs. Amadio came in financial loss because of the issue raised in the scenario and as enforceability of guarantee was charged by them, so the court took decision against Vicenzo. Inequality of bargaining power was decided by Justice Mason, where law of equity can be stated where equality may not be same for all the laws and power. Unfair terms in the legal rule is not supposed to be accepted by Mr. and Mrs. Amadio, as they are the strong party and intervention of contract with restore equity taken place on favor of the innocent party as per courts judgment (Australiancontractlaw.com, 2016). Firstly the bargain was ordinary and evidence was not found; secondly misrepresentation was done by Vicenzo not the bank; thirdly on the ground of equity Mr. and Mrs. Amadio felt relief because of the proper justice. For achieving fairness both Undue influence and Unconscionable conduct is described. It is said that weaker party is influenced to enter to an agreement in Undue influence and that result in coercion which is result of presumption. Positive trust in a relation is needed to be shown in undue influence. Whereas, in Unconscionable dealing exploitation of power with conduct of the party resume but because of negligence the court declare the case unconscionable conduct. Transaction takes place under unconscionable conduct (Assets for Care, 2012). Justice Deane took comprehensive decision by stating the facts with conclusion that the bank was guilty of unconscionable conduct and it was ordered that procurement of mortgage should be guaranteed by the respondents which they had not provided still the case is against the bank and Vicenzo is equally involved in this case with no remedy (Assets for Care, 2012). In this case similarity is found that the ratio is always in favor of Mr. and Mrs. Amadio and it was found that all the judges took same decision on favor of both of them. The claims prove that, it was unconscionable conduct which is procured by undue influence and misrepresentation is fact of concealment in this case. In the trial justice Amados entitled relief. The liability of the bank was limited. It was 50,000 which needed to be recovered in six months and mortgage and the guarantee was found unclear. The proceeding amount for general test was $239,830.85. The courts appeal was dismissed and it was a pure misrepresentation case with non disclosure relation which was described by the court on basis of trial judgment on the favor move Mr. and Mrs. Amadio. References Assets for Care. (2012). Undue influence unconscionable dealing. [online] Available at: https://assetsforcare.seniorsrights.org.au/relationship-breaks-down/equity/undue-influence-unconscionable-dealing/ [Accessed 18 Sep. 2016]. austlii.edu.au. (2015).High Court of Australia. [online] Available at: https://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/HCA/1983/14.html?stem=0synonyms=0query=title%20(%20%22amadio%22%20) [Accessed 17 Sep. 2016]. Australiancontractlaw.com. (2013).Australian Contract Law | Julie Clarke. [online] Available at: https://www.australiancontractlaw.com/cases/amadio.html [Accessed 17 Sep. 2016]. Australiancontractlaw.com. (2016). Australian Contract Law | Julie Clarke. [online] Available at: https://www.australiancontractlaw.com/cases/amadio.html [Accessed 18 Sep. 2016]. Misrepresentation act, 2001. (1976). Woolman. Vout, P. (2006).Unconscionable conduct. Pyrmont, N.S.W.: Lawbook Co.